Drone USA, Inc. Completes Acquisition of Premiere Distributor

Acquisition expected to be accretive to Drone USA’s earnings while
adding new products and another location to Drone USA’s operations

September 20, 2016 08:30 AM Eastern Daylight Time

NEW YORK--(BUSINESS WIRE)--Drone USA, Inc. (OTC Markets: DRUS) (“Drone USA” or the “Company”), a
developer and manufacturer of low altitude Unmanned Aerial Vehicles
(“UAV”) and related technologies, today announced that the Company has
completed the acquisition of Howco Distributing Corp. (“Howco”), a
leading wholesale distribution company. Drone USA had previously
submitted a letter of intent to acquire Howco , and entered into a stock
purchase agreement on August 4, 2016 to acquire Howco.

Completion of the acquisition establishes the Company’s presence on
the West Coast in addition to Drone USA’s New York offices;

Provides direct access to new supplier and vendor relationships
expanding Drone USA’s network into vertical industries and
strengthening of the Company’s market position;

Provides an opportunity for Drone USA to expand Howco’s business,
increasing the Company’s profitability over the long-term; and

Adds an experienced management team that has successfully established
a leading supply company known for its operational excellence within
the Federal Government sector.

The Company’s investment in Howco is a continuation of Drone USA’s
targeted acquisition strategy that involves the acquisition of
profitable businesses led by experienced management teams that have
well-established operating plans. As a part of the transaction, former
owners Paul and Kathy Joy have entered into employment agreements with
Drone USA to continue to oversee Howco’s day-to-day operations. For
2015, Howco reported annual sales of $23.4 million and earnings before
interest, taxes, depreciation and amortization of approximately $1.78
million.

Winner of the 2012 United States’ Department of Defense Logistics
Agency’s Bronze Supplier Award, Howco is a premier supplier of spare and
replacement parts to a wide variety of Federal Government agencies, US
military prime contractors and commercial customers worldwide. Founded
in 1990 and located in Vancouver, Washington, Howco is known for its
operational excellence that encompasses bid solicitation, contract
management, packaging and logistics. The Company expects that the Howco
acquisition will further Drone USA's business plan by assisting it in
capturing additional opportunities for growth and the development of
additional strategic relationships within the UAV supply chain.

Michael Bannon, Chief Executive Officer of Drone USA, stated: “Howco is
a leading supplier that continues to deliver on its strong track record
of operational excellence and solid relationships with OEMs and
suppliers. We believe the acquisition will increase our global footprint
and market share as we build Drone USA’s geographic presence on the West
Coast. We look forward to working with Mr. and Ms. Joy, their knowledge
and expertise has shaped Howco into the leading supplier it is today and
we are confident they will contribute greatly to the Company’s overall
growth.”

The Company purchased Howco for $3.5 million using a combination of $2.6
million in cash, a promissory note for $900,000 and the issuance of five
year Warrants to the Howco shareholders to purchase 500,000 shares of
Drone USA’s common stock at an exercise price of $0.01 per share.

Wellington Shields & Co. LLC acted as lead placement agent for the
transaction.

About Howco Distributing Corp.

Howco Distributing Corp. was established in 1990 with the mission of
being a leading and respected provider of construction, transportation,
mining and heavy equipment spare and replacement parts to customers
worldwide. Through a wide variety of supply chain solutions, Howco
Distributing Corp. is dedicated to execution excellence and support in
contract administration, military and commercial packaging services and
customer service. Focused on exceeding Government and Commercial
customer’s expectations of operational integrity, quality and ethics.

About Drone USA, Inc.

Headquartered at One World Trade Center in New York, NY, Drone USA plans
to become a primary developer and manufacturer of low altitude unmanned
aerial vehicles (UAV) and related technologies. Target markets include
select defense segments (military), public safety (police, fire,
emergency response), and high growth commercial applications such as
agriculture, photogrammetry, mining, utilities, and entertainment. The
Company seeks to strengthen its systems portfolio by acquiring UAV firms
with superior technologies that are proven in high-growth markets, as
well as complementary technologies such as sensors and software.

Certain statements in this press release may be considered
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements may include projections of matters that affect revenue,
operating expenses or net earnings; projections of growth; and
assumptions relating to the foregoing. Such forward-looking statements
are generally qualified by terms such as: “plans, “anticipates,”
“expects,” “believes” or similar words of like kind. Forward-looking
statements are inherently subject to risks and uncertainties, some of
which cannot be predicted or qualified. Future events and actual results
could differ materially from those set forth in, contemplated by, or
underlying the forward-looking information. These factors are discussed
in greater detail in the company’s business plan and filings with the
OTC Markets Group.